capitolbldg.no.cloudsOutlook for FY 2017 Appropriations

Senate and House Appropriations Committees Approve All 12 Bills

When Congress returns in September, it will be faced with the task of addressing FY 2017 appropriations before the end of the month. With the start of FY 2017 approaching on October 1, 2016, Congress has worked over the past five months to craft appropriations bills. This year, the Senate and House Appropriations Committees each approved all 12 appropriations bills. However, the full chambers have only considered and approved a handful of the bills. Congress must act in order to avert a potential shutdown, but with limited time for consideration of each bill, there are a few possible scenarios for how the appropriations process will play out.

It is highly unlikely in an election year that Congress will fail to approve funding and have a shutdown. The last shutdown in 2013 failed to accomplish its goals, and with an election quickly approaching, Republicans and Democrats have an interest in keeping the federal government open.

However, it is also unlikely that Congress will have the time or will to consider all 12 bills individually and send them to the President. With the short amount of time for work in September and before the election, Congress is most likely to approve a continuing resolution (“CR”), which continues funding at existing levels for a set amount of time. Some have suggested that a CR could run through the end of February 2017, punting the issue into the next administration and 115th Congress. However, while this proposal is unpopular among appropriators, who have worked to update funding levels for federal programs, the House Freedom Caucus would prefer this as it would deprive Congress of a must-pass legislative vehicle at the end of the year.

The most likely scenario is that in September, Congress will pass a short-term CR through mid-December. Then, after the election, Congress would consider an end-of-the-year omnibus, a single bill containing all 12 appropriations bills and a whole host of riders from Members looking to pass bills on the possibly last legislative vehicle of the Obama Presidency and 114th Congress. Uncertainty still exists in this process, and whether a future funding measure will adhere to previously agreed upon funding caps for non-defense and defense discretionary spending is still up for debate.

CMS Releases Proposed Rules on Hospitals, Physicians

On July 6, 2016, the Centers for Medicare and Medicaid Services (CMS) released the CY 2017 Hospital Outpatient Prospective Payment System (OPPS) and Ambulatory Surgical Center Proposed Rule (fact sheet and press release). Later that week, the agency also released the CY 2017 Physician Fee Schedule Proposed Rule (fact sheet and press release). The comment period for both rules runs through September 6, 2016.

In the Hospital proposed rule, CMS proposed a 1.6 percent payment update for the Hospital OPPS and 1.2 percent update for Ambulatory Surgical Centers. In addition, the rule proposes a 90-day reporting period for demonstrating Meaningful Use of electronic health records, and it proposes implementation of the site neutral payment provisions from the Bipartisan Budget Act of 2015. The proposed rule also includes a Congressional priority on opioids, proposing to change how pain management quality measures are factored into reimbursement, over concerns that doctors are pressured to overprescribe pain medicine to improve patient satisfaction measures or risk reductions in reimbursement for lower quality scores.

For the Physician Fee Schedule, the proposed rule includes Congressional priorities as well, including the creation of care coordination billing codes for treating chronic conditions and billing codes for comprehensive assessment and care planning for patients with cognitive impairment, such as Alzheimer’s disease or dementia. It also would provide increased payments for treating patients with mobility-related impairments and allow end-stage renal disease related services for dialysis and advance care planning services to be furnished through telehealth. Finally, the proposal would also align quality measures in the Medicare Shared Savings Program with the Quality Payment Program and implement national expansion the Medicare Diabetes Prevention Program.